Microsoft Gives $32 Billion Cash Windfall To Shareholders

In a bold move Microsoft announced plans to send shareholders checks totaling more than $32 billion.

The amount was higher than anticipated and is likely to wake up the summer slumber on the Street. Bill Gates will personally reap a $3.2 billion bonanza which he intends to donate to his charitable Foundation.

Microsoft will also pay an annual dividend of 32 cents to shareholders. This makes Microsoft's dividend yield 1.2% based on its current stock price. Over the next four years Microsoft will pay over $75 billion back to investors.

Microsoft's decision may pose bad news for Democrat presidential candidate John Kerry. Most observers say that Microsoft is timing this huge dividend so that it takes place before any possible repeal of the current lower tax rate that President Bush and the Republicans passed in Congress. Kerry has made it clear that he will push to at least double the current 15% tax if elected.

Republicans have said that a low dividend tax is an incentive for companies to give their profits back to shareholders. Nothing illustrates that more than Microsoft's move which is the largest single dividend payment in history.